Investment firm Jana Partners (Trades, Portfolio) disclosed on Jan. 4 it reduced its Jack in the Box Inc. (JACK, Financial) stake by 15.26%.
The New York-based firm, which is known to take activist positions in order to help unlock value, picks stocks using a value-oriented, event-driven approach. The firm was founded in 2001 by Barry Rosenstein.
According to GuruFocus real-time picks, a Premium feature, Jana sold 279,486 shares of the San Diego-based restaurant company for an average price of $78.63 per share, bringing its total holding to 1.5 million shares. The position represents 3.73% of the firm’s equity portfolio.
The fast-food chain has a $2.06 billion market cap; its shares were trading around $80.18 on Friday with a price-earnings ratio of 18.86 and a price-sales ratio of 2.66.
The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced.
The restaurant operator reported its fourth-quarter 2018 results on Nov. 19, posting earnings of 62 cents per share on $177.5 million in revenue. For the full year, the company recorded earnings of $3.62 per share on $869.7 million in revenue. Then, in December, it announced it is exploring a potential sale.
As a result of issuing new long-term debt and seeing a decline in revenue per share over the last several years, GuruFocus rated Jack in the Box’s financial strength 4 out of 10. Regardless, the Altman Z-Score of 5.36 indicates the company is in good fiscal standing.
The company’s profitability and growth scored a 5 out of 10 rating, driven by operating margin expansion, stable returns and a moderate Piotroski F-Score of 4, which implies business conditions are stable. The restaurant chain also has a business predictability rank of one out of five stars, which, according to GuruFocus, means its stock gains an average of 1.1% per year.
With 6.03% of outstanding shares, Jana Partners (Trades, Portfolio) is Jack in the Box’s largest guru shareholder. Joel Greenblatt (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio) are also invested in the stock.
Portfolio
Stocks in the consumer defensive sector make up the largest percentage of the firm’s $3.29 billion equity portfolio, which is composed of 52 holdings, followed by the health care sector.
As of Sept. 30, Jana Partners (Trades, Portfolio)’ five largest positions are Pinnacle Foods Inc. (PF, Financial), Zimmer Biomet Holdings Inc. (ZBH), HD Supply Holdings Inc. (HDS, Financial), Conagra Brands Inc. (CAG, Financial) and Tiffany & Co. (TIF, Financial).
Disclosure: No positions.
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